Book Value Vs Market Value Per Share
Market value per share is the current value of the stock.
Book value vs market value per share. Conclusion book value per share vs market value per share. The company s financial statements will reflect. The book value per share and the market value per share are some of the tools used to evaluate the value of a company s stocks.
The following day the market price zooms higher and creates a p b ratio of greater than 1 meaning market value now exceeds book value. Both book value per share and market value per share can indicate the financial strength of a company. This metric differs from market value because it s the shareholder s equity whereas market value is the real time market price or the amount the investor would receive if they were to sell the.
Book value gives us the actual worth of the assets owned by the company whereas market value is the projected value of the firms or the assets worth in the market. This is the price at which market values the stock. To an investor whether the p b ratio is 0 95 1 or 1 1 the.
For example if a stock is trading at a share price of rs 100 then this is the market value per share of that company. It is equal to the price per share divided by the book value per share. Book value per share is based upon the book value of the business.
Understanding both these values are relevant to stakeholders especially to investors as the valuation of the company can be best gauged by comparing both these values and calculating several financial ratios which are key to investment decision making. Market value is the current valuation of the firm or assets the ongoing price of the share in the market on which it can be bought or sold. For example a company has a p b of.
Book value is the actual worth of an asset of the company whereas market value is just a projected value of the firm s or asset s worth in the market. Book value is the company s value based upon its financial statements its books. Difference between face value market value book value market value.